Stockholm, Sweden - 29 April 2014
January-March 2014
* Sales were SEK 231.3 (240.3) m, corresponding to a decrease of 3.8%, and
6.9% adjusted for exchange rate fluctuations.
* Operating profit was SEK 21.5 (41.1) m, corresponding to an operating margin
of 9.3% (17.1).
* Net profit was SEK 18.6 (31.9) m.
* Diluted and basic earnings per share were SEK 0.67 (1.15).
* Cash flow from operating activities was SEK 1.6 (59.7) m.
CEO's Statement: Clear strategy for profitable growth
Sales volume on our biggest market, EMEA, remained stable in the first quarter
of the year. Volumes remained low in the Americas, affecting overall sales which
totaled SEK 231 m. Although this was an improvement on the preceding quarter,
the figure was slightly down year-on-year. Gross margin remained sound, and
lower expenses compared to the previous quarter contributed to an operating
margin of 9.3%.
I retain my positive view of Transmode's market, even if growth can fluctuate
between individual quarters and regions. In order to capitalize more on market
opportunities and improve our growth rate and profitability, we're continuing to
implement a number of initiatives within our strategic framework.
We're taking a combined approach to expanding outside Europe, and are developing
business with existing customers, approaching new customers and simultaneously
increasing our focus on partners. This is taking place within the framework of
our regional sales organization, which we introduced last year. Our partners are
an important channel for reaching enterprise customers and smaller network
operators, and we're focusing on developing existing collaborations as well as
identifying new partners.
Discussions are also underway with a number of large customers relating to
various niche applications such as Mobile Fronthaul and passive optical
infrastructure. This allows us to utilize the flexibility of our products to
approach new customer segments.
Our ambition is to lead the integration of Ethernet functionality in packet-
optical networks, and we launched several new products in the first quarter. The
new 100G Layer 2 Ethernet muxponder is the first of its kind on the market.
We also launched a new generation of compact products in the quarter. Our family
of "Hex cards" improve the cost-efficiency and competitiveness of our products
for critical characteristics such as high density and low power consumption.
Underlying market growth remains positive, mainly driven by video traffic, with
many of our customers reporting annual traffic increases of 40-50%. Our
products, based on WDM and Ethernet technology in combination with fiber, meet
our customers' capacity needs. There are no signs to suggest that the underlying
drivers have changed, and our customers' long-term investment needs remain
substantial.
I'm confident that our growth strategy of focusing on geographical expansion,
innovative products and efficient operations will pay off. Transmode is in a
strong financial position with clear financial targets, and we're well
positioned for continued profitable growth.
Karl Thedéen, CEO, Transmode
The InterimReport is attached and available via the link at the end of this
press release.
The information in this announcement is required to be disclosed by Transmode AB
under the Swedish Securities Markets Act (Sw. lagen om värdepappersmarknaden).
This information was released for publication at 08:00 AM CET on 29 April
2014.
This is a translation of the Swedish original. In case of any inconsistency
between the Swedish and English version, the Swedish version shall prevail.
Invitation to press and analysts conference
Transmode AB will hold a conference call (in English) for the media, investors
and analysts on 29 Aprilat 09:00 AM CET where CEO Karl Thedéen, and CFO Johan
Wilsby, will present and comment on Transmode's Year-end Report.
To access the telephone conference, please call UK +44 (0)203 1940552
alternatively, call the Swedish number +46 (0)8 50556483 and state that you are
joining the "Transmode conference call" a few minutes before the scheduled
start. The conference and presentation can also be followed live online, see
Transmode's homepage: http://www.transmode.com/en/investors/reports/interim-
reports
For more information please contact:
Ola Elmeland
Vice President Marketing & Communications
Transmode Systems AB
Telephone: +46 8 506 882 71
Email: ola.elmeland@transmode.com
About Transmode
Transmode is a global provider of packet-optical networking solutions that
enable fixed line and mobile network operators to cost effectively address the
capacity needs created by the rapid growth in video and data traffic. These
solutions are important building blocks in next-generation high-speed optical
networks that support services such as broadband backhaul, mobile data backhaul,
video delivery services and cloud computing. Transmode's solutions are designed
to increase the capacity, flexibility and functionality of metro and regional
networks and are based on Wavelength Division Multiplexing (WDM) and transport
technologies such as Ethernet. Transmode's Native Packet Optical 2.0
architecture gives customers key advantages such as cost efficient Ethernet
services, ultra-low latency, low power consumption and future proof network
design.
Transmode is headquartered in Stockholm, Sweden and is listed on the NASDAQ OMX
Stockholm Exchange (TRMO). Since 2000 the company has installed more than
40,000 systems for over 500 fixed and mobile network operators, service
providers, large enterprises and public institutions in over 45 countries across
the globe.
For additional information about Transmode, please visit www.transmode.com.
[HUG#1780775]
